Service Sector Basic Skills Gap in US – 62% of workers have limited literacy skills, and an even higher 74% have limited numeracy skills.

October 10, 2017

Across the United States, millions of men and women with limited reading, math, or digital problem-solving skills are holding down jobs across the service sector. Employed in retail shops and restaurants, hotels and hospitals, these workers not only help fuel the country’s economy — they keep daily life in America humming smoothly along.

In the course of their jobs, these workers o en need to read vital directions, follow safety protocols, calculate prices, supervise colleagues, and oversee budgets. All of these tasks are made dramatically more challenging for workers who don’t have strong literacy or numeracy skills. Many resort to creative work-arounds in an attempt to compensate for their lack of skills, but others struggle in silence. Their skill gaps carry heavy consequences for themselves, their co-workers, their employers, and our society as a whole.

This report offers a fresh analysis of rigorous international data, painting a picture of the approximately 20 million American workers employed in key service-sector industries who lack foundational skills. It highlights promising practices and interventions used by U.S. employers to help their workers to upskill. And it details key policy levers that can foster economic mobility for these workers.

Approximately forty-eight million Americans, or 32% of the U.S. workforce, are employed in the service sector industries of retail; health and social assistance; and leisure and hospitality. However, low wages, unpredictable schedules, and limited opportunities for promotion can constrain the ability of workers to advance within the service sector. Lack of opportunity for advancement can affect workers’ decisions about whether to stay in the sector over the long term. Conversely, workers who do see their skill gains rewarded with opportunities to advance in their chosen field have a clear incentive to stay in the sector.

Data in this report is drawn from the Organization for Economic Cooperation and Development (OECD) Survey of Adult Skills, known as the PIAAC.4 Within that dataset, National Skills Coalition’s (NSC) analysis focuses on U.S. adults ages 16-64, who are employed, and have limited basic skills in reading, math, or technology.



Overall, 62% of service-sector workers in the target occupational categories have limited literacy skills, and an even higher 74% have limited numeracy skills. A similar 73% lack digital problem-solving skills, not including the workers who declined even to take the technology portion of the test. These findings are a stark illustration of a broad swath of the American workforce that is functioning without critical skill sets necessary to their jobs.

Understanding the demographic and other key characteristics of service-sector workers with low basic skills can help inform strategies for aiding these workers to build skills and achieve economic mobility. NSC found that:

Workers are demographically diverse, and most are adults. A majority (61%) of service sector workers with low skills are women. Nearly half (46%) are white, 20% are black, 26% Hispanic, 5% Asian/Pacific Islander, and 4% report their race or ethnicity as other. A quarter (25%) are immigrants. Twenty-nine percent do not speak English as their first language.
Contrary to the image of service workers as teens and young adults, a full three-quarters of those with low basic skills are over the age of 25, including 52% who are age 35 or older. Most are parents. Nearly two-thirds (64%) of service-sector workers with low literacy are parents.

A significant number work for small- and mid-sized employers. The overwhelming majority of workers with low skills (84%) work at locations with fewer than 250 employees, including 56% who work at locations with fewer than 50 employees. While some of these are local worksites that are part of alarger company, many others are not: Overall, 30% of workers with low skills are employed in small to mid-sized businesses.

A strong majority of workers have been with their employer for at least 3 years. An important finding contradicted the common assumption that service-sector positions are short-term jobs. Rather, a full 58% of workers have been with their current employer for at least three years. This includes 36% — more than 1 in 3 workers — who have been with their employer for at least six years.


Chosen excerpts by Job Market Monitor. Read the whole story at Foundational skills in the service sector: understanding and addressing the impact of limited math, reading, and technology proficiency on workers and employers